2015-10 IFN Working Paper No. 1086
In some classes of models, taxes at the owner level are “neutral” and have no effect on firm activity. However, this tax neutrality is sensitive to assumptions and no longer holds in more complex models. We review recent research that incorporates greater complexity in studying the link between taxes and business activity – particularly entrepreneurship.
2015-01 IFN Newsletter No. 1, 2015
The private equity industry has grown immensely during the last three decades. It is a global phenomenon, making private equity firms important owners of corporate assets. So far, the industry has shown no signs of slowing down, and the trend is likely to continue into the future. However, as private equity buyouts are often controversial, there is a need for research about their real economic consequences, such as effects on firms and workers.
2014-05 IFN Working Paper No. 1020
We review and assess the role local institutional framework conditions play in fostering local entrepreneurship. The basic premise is that entrepreneurship is a central driver of economic renewal and change, and that institutions affect both the supply and direction of entrepreneurship.
While local institutions always develop and operate against the backdrop of national institutional frameworks, in particular in non-federal states, our review shows that there is plenty of room for local initiatives and policies to influence the entrepreneurial climate locally. This pertains to both formal (e.g., taxes, regulations and stringency of enforcement) and informal (e.g., attitudes and social legitimacy) institutions.
We further argue that the local institutional environment is essential in any local policy aimed to foster productive (high-impact) entrepreneurship. Favorable local institutions not only increase the odds that a region develops or manage to attract entrepreneurial incumbents, but also the odds that a region reaps the full potential of hosting entrepreneurial and knowledge-intensive activities.
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2014-10 IFN Newsletter No. 2, 2014
Capitalism can create prosperity only if there is a clear separation between the market and the political sphere, argues Andreas Bergh in his new book Sweden and the Revival of the Capitalist Welfare State (Edward Elgar Publishing, 2014).
2014-01 IFN Newsletter No. 1, 2014
The debate about nuclear power focuses mostly on safety, environmental costs for nuclear waste and climate benefits due to reduced carbon emissions. A further potentially important aspect is the consequences associated with the concentrated ownership structure of Nordic electricity plants, including the Swedish nuclear power plants. In this article, Sven-Olof Fridolfsson examines the contested issue of whether market power may lead to underinvestment in nuclear power.
2014-05 IZA World of Labor 2014:38
Economic growth necessitates extensive churning and restructuring, the bulk of which is about shifts from less to more successful firms within the same industry. Labor market institutions favoring reallocation and dynamism include portability of tenure rights, fully actuarial and portable pension plans, a full decoupling of health insurance from the current employer, decentralized and individualized wage-setting arrangements and government income insurance systems that encourage activation, mobility and risk-taking.
2013-02 IFN Newsletter No. 2, 2013
In this report, the researchers show that privatisations in Sweden have had a positive effect on productivity development but a negative effect on product market competition. These increases in productivity often arise before the actual acquisition. This finding suggests that studies investigating the effects of privatisations at the point in time of the acquisition may underestimate the improvements in efficiency.
2011-01-03 IFN Working Paper No. 858
The literature on the relationship between the size of government and economic growth is full of seemingly contradictory findings. This conflict is largely explained by variations in definitions and the countries studied. An alternative approach – of limiting the focus to studies of the relationship in rich countries, measuring government size as total taxes or total expenditure relative to GDP and relying on panel data estimations with variation over time – reveals a more consistent picture: The most recent studies find a significant negative correlation: An increase in government size by 10 percentage points is associated with a 0.5 to 1 percent lower annual growth rate.
Nordic Economic Policy Review, No. 1, 2011
This article surveys the literature and adds to the evidence on the impact of employment protection legislation on employment. While stringent employment protection contributes to less turnover and job reallocation, the effects on aggregate employment and unemployment over the business cycle are more uncertain. Exploitation of partial reforms and the use of micro data in recent research appear not to have affected results regarding employment and unemployment in any systematic way. Labour market prospects of young people and other marginal groups seem to worsen as a consequence of increased stringency of the legislation.
It is debatable whether marginal groups have gained much from the widespread policy strategy to liberalize regulations of temporary employment and leave regulations of regular employment intact. My own analysis suggests that increased stringency of regulations for regular work is associated with a higher incidence of involuntary temporary employment, particularly among the young.
2010-09-09 IFN Working Paper No. 851
Private equity buyouts have become a common element in the industrial development process. I survey the literature on the real economic effect of buyouts: employment, wages, productivity, and long-run investments. Employment tends to marginally fall after a buyout in most countries studied, with France being the exception. There are clear evidence of productivity gains following a buyout, with part of these being shared with workers through higher wages. The evidence is mixed regarding the effects on long-run investments.
2009-12-10 IFN Working Paper No. 816
We survey the literature on social networks by putting together the economics, sociological and physics/applied mathematics approaches, showing their similarities and differences.
2009-08-18 IFN Working Paper No. 804
Public policy is currently shifting from SME policy towards entrepreneurship policy, which supports entrepreneurship without directing attention to quantitative goals and specific firms or employment groups.
2008-12 Vinnova Report VR 2008:19
In 2004, the public sector in the OECD countries spent approximately USD 190 billion on research and development (R&D), which corresponds to almost 30 per cent of all the R&D (USD 650 billion) conducted in these countries. If we examine who carries out R&D, we can see that the private sector accounts for 68 per cent, Government research institutes (laboratories) for 12 percent, universities for 17 per cent and other nonprofit organisations for 3 per cent. Here there are cases where the Government funds R&D in the business/industrial sector and vice versa, but in Europe the overwhelming majority of Government funding goes to Government-controlled universities and research institutes.
2008-02-08 IFN Working Paper No. 733
It is often claimed that small and young firms account for a disproportionately large share of net employment growth. We conduct a meta analysis of the empirical evidence regarding whether net employment growth rather is generated by a few rapidly growing firms – so-called Gazelles – that are not necessarily small and young. Gazelles are found to be outstanding job creators. They create all or a large share of new net jobs. On average, Gazelles are younger and smaller than other firms, but it is young age more than small size that is associated with rapid growth. Gazelles also seem to be overrepresented in services.
2008-01-31 IFN Working Paper No. 732
Taxation theory rarely takes entrepreneurship into consideration. We discuss how this omission affects conclusions derived from standard models of capital taxation when applied to entrepreneurial income.
2007-03-08 IFN Policy Paper No. 12
This paper presents a survey of the literature on property rights and economic growth. It discusses different theoretical mechanisms that relate property rights to economic development. Lack of protection of property rights can result in slow economic growth through different channels: expropriation of private wealth, corruption of civil servants, excessive taxation and barriers to adoption of new technologies. The origins of property rights are also considered. Different theories are illustrated but more attention is paid to the “social conflict view” and its strengths and limitations. The second part of the paper illustrates relevant empirical works on property rights and growth.
2006-12-20 IFN Working Paper No. 684
This paper surveys the law and economics literature on WTO dispute settlement. As a background, we first briefly lay out main features of the legal framework, and discuss possible roles of a dispute settlement mechanism. We then discuss the two main themes in the empirical literature on dispute settlement: (i) the determinants of participation by members as complainants, respondents and third parties; and (ii) the role of the DS system for the settling of disputes. The paper finally points to a number of areas that are in need of further research.